Just as people often have role models who they aim to become when they grow up, many startups aspire to attain the success of bigger brands. However, just as startups are looking to expand and grow to become industry powerhouses, big brands are trying to mimic startups by building ideation labs and incubators, or developing startup-like cultures through flat organizational structures and open-seating layouts. They have realized that if you do not disrupt the industry, someone else will.
According to Mario Bartels, a consultant at leading brand strategy firm Vivaldi, to be more disruptive, big brands can learn three key lessons from startups.
1. Know Your Customer
Successful startups have a visceral and profound understanding of their customers. “They may not have the resources for sophisticated market research or focus groups, but they speak to customers directly and so understand their pain points, desires, and experiences firsthand,” Vivaldi explains. “In some cases, startups are even the result of founders having an unfulfilled need in their own lives and addressing it. For example, the Hello Alfred startup offers its users the service of a concierge, on-demand. It was launched when the co-founders realized that working long hours and handling all of the other things in life, like taking care of yourself and your apartment, do not go hand in hand. Being your own customer helps your understand which element of the customer experience to focus on and where to prioritize human connection over mere transactions.”
Vivaldi suggests that big brands should take note and follow the lead of their customer-centered startup counterparts. “There is no doubt that having access to and analyzing big data is helpful in identifying market trends and developments. However, having firsthand interactions with customers and observing them in their buying or usage environment is valuable to build an intuitive understanding of behavior and to gain real-time feedback,” he say. While big data is great, getting lost in the numbers can sometimes lead to big brands forgetting to truly understand their customers.
2. Focus on your employees
The smaller the company, the better the understanding of how important employees are for its success as each employee’s impact is more visible. “Successful startups are often best in class in acquiring and developing talent effectively,” Vivaldi says. This is because startups need to articulate clearly what they stand for and have to ensure that the people they hire believe in the brand’s purpose as much as the founders for one crucial reason: employees can be the biggest advocates and proponents of the brand to customers.
“The lesson for bigger brands is to apply brand engagement approaches internally and transform employees into brand ambassadors,” Vivaldi suggests. “Apple, for instance, has achieved this, as their employees live for the brand and its purpose. Everyone who has visited an Apple Store and talked to an employee or ‘Genius’ gets that idea.”
3. Encourage experimentation
Based on the shortage of financial resources and time, startups have to develop products quickly and test them at an early stage. It is very rare that the initial version of a startup’s product is the one that brings big success. Rather, a minimum viable product (MVP) is brought to a smaller audience in an attempt to efficiently gather feedback and gain firsthand user experience. The goal is to kill bad ideas early and hone in on the ones which are good, just like Flickr started as an online role-playing game before becoming the successful image and video hosting platform it is today.
“Big brands fall into the trap of trying to achieve perfection, which is often rooted in a lack of an encouraging culture,” Vivaldi says. “Instead of viewing mistakes or missteps as an opportunity to learn from the market or customer, they are viewed more as a dearth of management competency. Therefore, embracing experimentation for big brands means fostering a shift in mindset to accept failure as what it is: a chance to improve. Instead of investing a lot of time perfecting a product before testing it among actual customers, conducting a sequence of small experiments helps to efficiently build a product that is truly relevant to customers.”
In times of increasing digitalization and dynamic customer behavior it becomes crucial for companies to listen to their customers and address their pain points and needs in real-time. The entrepreneurial attitude and practices of small startups can be extremely valuable for big brands and corporations looking to get out of their insulated headquarters and back to the customer frontlines.
This article was originally featured in Forbes.